Wednesday, March 27, 2013

The tax deadline is coming up in a few weeks. When submitting your
taxes, you hope you will not be audited because of a slight mistake.
These are three simple ways to avoid being audited, and making sure your
taxes are done correctly. You can learn more at RealSimple.

Report all your income. You must tell the IRS about every penny
of income that you make, including stock dividends, cash payments,
gambling winnings, jury-duty payments, and unemployment
benefits. The amounts must match the
forms that are submitted to the federal government by your employer,
banks, or third-party
payers. If there is even one digit off,
the IRS could note the mismatch and generate an inquiry.

Be cautious when claiming deductions.
Be prepared to back up every deduction—particularly car write-offs,
charitable contributions, and business purchases—with
written documentation, especially if
you are self-employed or make more than $100,000. And be precise:
Deductions rounded
to the nearest hundred-dollar amount
could up your risk. “That signals you are not keeping records,” says
Frederick W. Daily,
author of Stand Up to the IRS (Nolo, $35, amazon.com).

Check your work. A
simple math error won’t automatically trigger an audit, but it can give
the IRS a reason to revisit your return, which
increases the odds that it might find
other problems. When figuring your taxes, check your math. Twice. Or
hire a reputable
tax preparer (but never sign your
return until you have reviewed it). You can also use a computer program,
like Turbo-Tax. The software won’t make silly mistakes.